Business Objectives and Stakeholder Objectives

Question 1

Business Objectives

Answer 1

Business objectives are aims or targets a business works towards

Question 2

Benefits of having business objectives:

Answer 2

• Employees have a clear target to work towards
• Decisions made keeping in mind objectives
• Clear & measurable objectives will make sure the entire organisation works towards the same goal
• Managers will be able to compare performance
• A business objective maybe changed if economic conditions change or one objective has already been achieved

Question 3

Business objectives:

Answer 3

Business Survival - Adjust to business environment, change price of products if necessary
Generating profit – pay a return to owners or provide finance to invest further in business
Growth of business – increase salaries, economies of scale. only achieved if customers are satisfied with the product
Market Share – the proportion of the total market sales by one business, gives good publicity, more influence over suppliers and customers
Service to community – provide jobs, support disadvantaged groups in society, protect environment

Question 4

Stakeholders

Answer 4

A stakeholder is any person or group that is interested in or directly affected by the performance or activities of a business

Question 5

Types of stakeholder groups

Answer 5

Internal Stakeholders work/own the company (owners, managers, workers)

External Stakeholders are outside of the business (consumers, government, banks)

Question 6

internal stakeholder Aims

Answer 6

Shareholder/ Owners: They invest capital into the business
Objectives:
- return on the capital they have invested
- Business growth

Workers: people that are employed by the business
Objectives:
- Contract of employment
- Regular payment
- job satisfaction
- job security

Managers: control the work of others.
Objectives:
- job security
- Higher salaries
- business growth

Question 7

External stakeholder Aims

Answer 7

Customers objectives are reliable products, value for money, good quality, good design and good service

Government objectives include: money from taxes, will employ more people, increase country’s output

Banks objectives are to make profit out of loans

community objectives are to employ local employees, no way harm the environment.

Question 8

Example of Conflicts of stakeholders’ objectives

Answer 8

For example, workers will aim towards earning higher salaries. Shareholders might not want this to happen as paying higher salaries could mean that less profit will be left over for payment of return to the shareholders.

Similarly, the business might want to grow by expanding operations to build new factories. But this might conflict with the community’s want for clean and pollution-free localities.